Azerbaijan agrees to supply additional gas to Georgia

/By Azernews/

By Aynur Karimova

Tbilisi has reached an agreement with Baku on supply of additional “blue fuel” from Azerbaijan, which is Georgia's main gas supplier with a specific weight of 74.9 percent of total gas imports.

The relevant agreement on supply of additional blue fuel in the amount of 463 million cubic meters was signed on March 4 between Azerbaijan's state energy giant SOCAR and the Georgia government, Mahir Mammadov, the Director General of SOCAR Energy Georgia, told Trend.

“Previously, we supplied 800 million cubic meters of gas a year to Georgia from the Shah Deniz,” he said. “We have managed to increase the supply through that route to 1.5 billion cubic meters, as well as to 1.5 billion cubic meters via a pipeline connecting the two countries in Azerbaijan’s Gazakh region.”

Earlier, SOCAR President Rovnag Abdullayev said that Azerbaijan will additionally supply 500 million cubic meters of gas a year to Georgia.

In accordance with the agreement, Georgia will receive additional gas volumes from Azerbaijan.

SOCAR expressed readiness to reduce the price of commercial gas for the Georgian gas filling stations by $35-$40 per 1,000 cubic meters. Compared with 2012, gas consumption in Georgia increased by 40 percent, which made it necessary to purchase additional volumes, Georgia Online reported quoting the country’s Energy Ministry.

Azerbaijan supplies gas to Georgia via the Hajigabul-Gardabani pipeline with a gas pumping capacity of 6.5 million cubic meters per day.

The second way carrying gas to Georgian consumers is the Baku-Tbilisi-Erzurum (South Caucasus) Pipeline, through which the gas from the first stage of the Shah Deniz field is supplied to Georgia and a large proportion goes through its territory to Turkey.

Russia also supplies gas to Georgia. Russian gas deliveries to Georgia are carried out only in the form of payment for its transit to Armenia, for which the country receives 10 percent of total shipments. Gazprom supplied 300 million cubic meters of gas to Georgia in 2014.

Daily gas consumption in Georgia exceeds 11 million cubic meters per day and about 2.5 billion cubic meters per year. Last year, the country imported 1.51 million tons of oil equivalent of natural gas in the amount of $314.3 million from Azerbaijan.

On an annualized basis, the volumes of Georgian natural gas imports from Azerbaijan in terms of value increased by 9.4 percent, in quantitative terms by 127,170 tons of oil equivalent, or by 9.2 percent.

No need for Iranian gas

Georgia, with its huge transit potential for delivering hydrocarbon resources of the Caspian basin, has recently expressed intention to transit Iranian blue fuel to Europe.

However, as Georgian Energy Minister Kakha Kaladze said at a press conference with Abdullayev in Tbilisi on March 4, after reaching an agreement with SOCAR, the need to obtain natural gas from Iran no longer exists.

He said that Georgia has launched parallel negotiations with Iran on gas purchase due to the technical problems of natural gas supply from Azerbaijan.

"We had a meeting and talked about the possibility to receive Iranian gas. In theory, there is an opportunity for this, but today such a need does not exist. We have formalized an agreement with the country," he added.

Earlier, Kaladze said that the Iranian gas prices are not competitive, so the issue on the purchase of Iranian gas can only be discussed in the future.

In mid-February, Alireza Kameli, the Head of the National Iranian Gas Export Company, said the Islamic Republic is considering a plan to export 200 million cubic meters of gas to Georgia in a course of seven months.

He further said that Tehran and Tbilisi would consider signing a long-term deal, if they find a short-term gas deal economically justified.